JUDY WOODRUFF, CNN ANCHOR: George W. Bush borrows a phrase from Al Gore, as he slams the vice president's new tax cut plan.

Gore, meantime, is trying to ease a new labor problem involving his incoming campaign chairman.

Plus, it feels like the early 1970's all over again in the political "Play of the Week."

ANNOUNCER: From Washington, this is INSIDE POLITICS, with Bernard Shaw and Judy Woodruff.

Thank you for joining us. Bernie is on assignment.

A day after Al Gore's campaign shakeup overshadowed his new, expanded tax cut proposal, George W. Bush stepped in and gave the Gore plan some publicity -- that is, some negative publicity.

As our Candy Crowley reports from Ohio, Bush framed the tax issue as a contrast between his leadership skills and Gore's.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): Texas Governor George Bush thinks the vice president's decision to increase his tax cut is based on numbers, but not the ones in the ever-growing budget surplus.

BUSH: Somebody told me -- I think I read where, you know, they were running a series of focus groups, and so he made a decision to expand his vision on tax cutting because of focus groups. Surely America doesn't want a focus group-driven presidency.

CROWLEY: At a bit over $500 billion, double his original plan, the vice president's tax cut is still less than half the $1.3 trillion Bush plan. Unveiling his package Thursday, Gore says he upped the ante because the surplus is bigger than anticipated, but still not enough to accommodate the Bush numbers.

AL GORE, VICE PRESIDENT OF THE UNITED STATES: This tax relief package for middle-income families can help to solve the most important challenges that families face today. This package, big as it is, stands in sharp contrast to an alternative that would completely eliminate the budget surplus and threaten the underlying prosperity.

CROWLEY: Bush's sizable tax package has been a big target since it was unveiled. Gore has used it repeatedly as the core of his effort to frame Bush as not ready for prime time.

GORE: And we can do it within a balanced budget and continue to pay down the debt if we just make the responsible choice and forego that $2 trillion risky tax scheme.

CROWLEY: Gore has called the Bush plan risky so often, the governor couldn't stop himself when first asked for his reaction to the vice president's revised plan.

BUSH: Really risky -- no, just kidding.

CROWLEY: Gore aides still characterize the Bush plan as not responsible. They say Gore targets his tax cuts to the middle class for help in education, health care and child care, while Bush offers an across-the-board tax cut the Gore camp says mostly benefits the rich.

Be wary of targeted tax cuts, responds Bush, they are targeted for political reasons.

By continually suggesting that Gore makes policy based on polls, Bush hammers at what his campaign believes is the heart of campaign 2000: leadership.

BUSH: I'm a good decider. I know how to make decisions.

CROWLEY: The use of polls and focus groups were a constant theme in the Bush news conference, whether the subject was his support of the death penalty, his Social Security plan or his tax cut plan.

BUSH: These are principled positions I've taken. I've taken them ever since the campaign began, and I don't need a poll or a focus group to tell me what to believe.

CROWLEY (on camera): He is walking a fine line here because the Bush campaign also takes polls and conducts focus groups. The difference, the governor implies, is that he doesn't use them to formulate opinions or make policy.

Candy Crowley CNN, Canton, Ohio.

(END VIDEOTAPE) WOODRUFF: Well, Bush's claim that he is a "good decider" may be resonating with voters. Our new CNN/"Time" magazine poll of likely voters nationwide shows Bush leading Gore 49 percent to 45 percent. Those numbers tell only part of the story.

Our Bill Schneider joins us now.

Bill, what does the poll show to be Bush's biggest advantage?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: One word: leadership. Sixty-two percent call Bush a strong and decisive leader. Only 44 percent say the same thing about Gore. Gore's leadership deficit is actually getting bigger. Bush has gained six points on leadership since Super Tuesday, while Gore has dropped three.

Now leadership has always been a problem for a vice president. A vice president's job is to be a follower, not a leader. In fact, Governor Bush's father faced a leadership deficit when he ran for president in 1988. At the end of the '88 primaries, Governor Michael Dukakis was seen as a stronger leader than Vice President Bush. But Dukakis only had a five-point edge. The vice president managed to turn that around after the conventions.

Vice President Gore faces an 18-point leadership deficit, mostly because Governor Bush has a much stronger image as a leader than Governor Dukakis had in 1988. This time, the leadership deficit is not just because Gore is the vice president, it's also because Gore has a forceful and charismatic opponent.

WOODRUFF: All right, Bill, setting leadership aside, what about the issues? What do the polls say about Gore's chances on wining on issues?

SCHNEIDER: Well, that's possible, because that is where Bush has always been weakest. But when we looked at the issues, we found some surprising things. Take a look at issues that voters say are the most important this year.

On education, Gore and Bush are rated just about equal. Bush's emphasis on education has about neutralized what's traditionally been a good issue for Democrats.

Bush has also neutralized the Social Security issue -- Social Security! The mother of all Democratic issues! Franklin Roosevelt, the New Deal! When Bush proposed allowing some Social Security funds to be privately invested, Democrats thought that would finish him off, like Barry Goldwater. But 1964 was a long time ago. Americans seem to be receptive to new ideas, even about Social Security.

Gore does retain the edge on Medicare, though it's a small one -- six points. That's where Republicans are racing to catch up with Democratic proposals to cover prescription drug costs.

Education, Social Security, Medicare -- these issues ought to be working much better for Gore than they are now.

WOODRUFF: But what about -- what does the poll show about other so-called "social" issues, abortion, guns?

SCHNEIDER: Well, you know, Democrats figure they can use those issues to paint Bush as too extreme. But look at these findings. Most Americans favor stricter gun control, but they say Bush is closer to their views on guns. Most Americans support abortion rights, but they say they agree with Bush and Gore about equally on abortion.

On guns and abortion, Bush seems to have convinced the public that he really is a moderate who would take a balanced position. It may not be so easy to depict Bush as an extremist.

WOODRUFF: All right, very interesting. Bill Schneider, thanks.

SCHNEIDER: Sure.

WOODRUFF: And no doubt Gore is hoping his new campaign chairman, Bill Daley, will help him improve his ratings among voters. But by tapping Daley, Gore may not have helped his effort to solidify union support.

CNN's Chris Black reports on the backlash and what Gore is doing about it.

(BEGIN VIDEOTAPE)

CHRIS BLACK, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Vice president Al Gore wasted no time making amends with organized labor upset over his choice of Commerce Secretary William Daley as his new campaign chief.

Gore met privately with AFL-CIO President John Sweeney at the vice presidential residence Friday, a day after an angry phone call from Sweeney.

Sources in both camps say Sweeney told Gore labor should be consulted major changes in his campaign, and warned the appointment of Daley made it more difficult for Sweeney to build enthusiasm for Gore's candidacy.

In a statement, Sweeney expressed concern about Daley's leadership role on the North American Free Trade agreement and the bill giving China permanent normal trade relations, saying, "It put him squarely on the opposite side of working men and women."

Gore had tried to call Sweeney first thing Thursday morning but missed him; Sweeney was flying to Las Vegas. Gore aides say labor is crucial to winning battleground states, including Ohio, Pennsylvania, and Michigan. Daley acknowledged labor's importance, defending his record in citing his role as head of a unionized bank in Chicago.

WILLIAM DALEY, CORE CAMPAIGN CHAIRMAN: I have always had a very good relationship with labor.

BLACK: And Daley says he is not the issue.

DALEY: And working men and women and organized labor know that this administration, this vice president, has been there fighting for them day in and day out for the last eight years as vice president.

BLACK: Daley is already showing he will take a higher public profile than Coelho, appearing on a television network morning show on Friday.

BLACK: And Daley will be a guest on all five TV talk shows this Sunday.

While Daley's appointment stepped on the message of what Gore calls his "Progress and Prosperity Tour" with the national media, it played differently in Ohio, where he announced Daley's new role. Ohio reporters focused on Gore's plan to double his targeted tax cut proposal to $500 billion over 10 years.

(END VIDEOTAPE)

BLACK: Al Gore and John Sweeney met for about an hour this afternoon, and had what Sweeney's spokeswoman described as a "good" discussion that focused on campaign structure and communications, and she said left Sweeney reassured that the vice president is focused on the issues affects working people and how to improve the lives of those working people -- Judy.

WOODRUFF: All right, CNN's Chris Black, thanks very much.

And now we are joined by Bill Kristol of "The Weekly Standard" and former Clinton senior adviser Rahm Emanuel.

Rahm, let's go to you first. On this whole question of Tony Coelho out, Bill Daley in, what more was going on behind the scenes other than Tony Coelho's health, which we know was one factor?

RAHM EMANUEL, FORMER CLINTON SENIOR ADVISER: Well, I mean, I think that that is the factor. That's the factor I know about, and I think that, you know, Bill Daley -- this is a seamless choice, and I think Bill Daley's the right person for the right time to take this campaign and help guide it in the general election. But no doubt the campaign will be set from the candidate, not from who the chairman is.

WOODRUFF: Bill Kristol, how much of a difference will it make that there's been a change in the chair of the campaign?

WILLIAM KRISTOL, "THE WEEKLY STANDARD": It could make quite a big difference, Judy, and I think it's a pretty significant change. What's happened over the last four months? What's happened is that George W. Bush has succeeded in moving to the center and taking back that middle ground that Bill Clinton seized so successfully in 1992 and 1996. George W. Bush is now running as the "New Democrat." And under Tony Coelho's guidance Al Gore was running as an old liberal Democrat.

Bill Daley's appointment is the Bill Clinton takeover of the Gore campaign. It's a New Democrat takeover. Bill Daley is very close to Bill Clinton. Tony Coelho wasn't. Tony Coelho fired Bill Clinton's pollster, Mark Penn. Tony Coelho didn't invite in people like our friend Rahm Emanuel, who was so skillful in 1992 and '96. Now you're going to see the Clinton people coming back in, I think, as Gore tries to go back to the center.

WOODRUFF: Rahm, is this is a Bill Clinton takeover?

EMANUEL: No. Well, listen, first of all, this is, I think, you know -- there's -- there's all those signs. I won't disagree with what Bill said there, but I think you're over-reading and overinterpreting. It must be a very slow Friday here.

I think, look, my home view is that Al Gore set the parameters of his campaign, where he's going to be on Social Security, where he's going to be on taxes (UNINTELLIGIBLE). There's no doubt that I will say that George W. Bush has had a good spring. I do think that this is the right move. I think the precipitating event is Tony's health.

Bill Daley is going to be a more -- is going to be a forceful chairman who will be out there. And the two of them, having seen them both as secretary of commerce and the vice president, two very comfortable people who know who each other, known each other for years. I think this is a good omen for the campaign. I think Tony did the right things and very successfully led the campaign in the primary, not losing a single primary.

I think that given the health concerns this is a perfect move. I would not over-read this, although I probably -- it was a very slow Friday, so people are looking for other meanings there.

WOODRUFF: Well, it's not that slow.

(LAUGHTER)

Bill Kristol, whatever it may be, whether it represents a Bill Clinton takeover or whatever, is it a smart move on the part of the vice president?

KRISTOL: I think so. I mean, Tony Coelho was a good primary campaign manager for Al Gore, because he knew how to appeal to Democratic constituencies, which is what you have to do to win the Democratic primary. I don't think he's in touch with the centrist voters of the 1990s or 2000.

Bill Daley is a New Democrat. He was involved in '92 and '96. The question is whether Al Gore can now redirect his campaign to be much more of a New Democrat campaign.

WOODRUFF: Let me ask you both about something different: New York businessman Ted Forstmann this week offered to put a million dollars into the children's charity of choice of either Governor Bush or Vice President Gore if they would agree to a debate on education.

Rahm Emanuel, good idea?

EMANUEL: I think it is excellent. I mean, I don't know if I would take the million dollars -- million dollars of charity. I'm sure during the debates that we're going to debate education. If they want to have one solely on education, I mean, if I was in the campaign, I'd accept that.

I think that's a smart idea. I think Al Gore's positions, as you go down the items, is very strong. And I think that probably it'd be a good idea to have on Social Security a debate on that, a good idea on Medicare, a good idea on the environment, a good idea on job training, and a good idea on the economy and foreign policy. If they want to set them one by one.

WOODRUFF: And Bill Kristol, should Governor Bush agree to this and these other debates?

KRISTOL: I think he should consider agreeing to this one. I think he wants to have a debate earlier rather than later to take the edge off the expectations that he's going to be crushed by Al Gore in the debate.

Education is one of Governor Bush's strongest topics. Ted Forstmann is going to give all this -- $500,000 to each candidate's favorite charity. Governor Bush, should dare Al Gore, double or nothing: $1 million to the debate winner's favorite charity. And I think it would be to Governor Bush's advantage to debate education with Al Gore before the conventions.

EMANUEL: Bill, you wouldn't be -- I don't mean to do this to you. But you wouldn't be opposed to a debate on foreign policy or Medicare, would you? Separate debates on those subjects, would you?

KRISTOL: No, I think foreign policy is a very important issue. And Governor Bush isn't exactly taking my advice, and I suspect they will not debate until after the conventions.

EMANUEL: We'll get...

WOODRUFF: We've got less than a minute, Rahm Emanuel. Just quickly, any late word on what direction the vice president's moving on a vice presidential choice?

EMANUEL: Well, I -- listen, I think both campaigns on this, on the vice president for Vice President Gore, I think both candidates will pick a candidate who accentuates their message. And I think Gore will look, one, for experience, which is what I would look for in the quality that you want, rather than somehow a balance to the ticket.

WOODRUFF: And Bill Kristol, John Danforth taking himself out: Significant? KRISTOL: I think so, because when he took himself out, I'm told that Governor Bush called him and said, Jack, if there's anything I could do, if I could get on a plane tomorrow and fly to Missouri and persuade you to put yourself back in, I'd get on that plane. Maybe Governor Bush was just being nice to Senator Danforth. But I do think Danforth was the kind of pick Bush wanted to make: a safe, moderate, but pro-life pick who wouldn't cause any trouble at the convention.

WOODRUFF: All right, Bill Kristol, Rahm Emanuel, thank you both. Great to see you on this not-so-slow Friday.

(LAUGHTER)

Have a great weekend, both of you.

Coming up on INSIDE POLITICS, George W. Bush still on the defense about the death penalty.

(BEGIN VIDEO CLIP)

BUSH: We have not put to death somebody who didn't -- was innocent.

(END VIDEO CLIP)

WOODRUFF: So why isn't Al Gore seizing on an issue dogging his GOP rival? Bruce Morton considers that question and the politics of capital punishment, when we come back.

(COMMERCIAL BREAK)

WOODRUFF: Less than a week before another inmate faces execution in Texas, George W. Bush today restated his confidence in the state's death penalty system. Reporters, once again, peppered Bush with questions about capital punishment. But to date, Al Gore hasn't seemed interested in jumping into the fray.

Our Bruce Morton looks at the death penalty issue and the political calculations for Bush and Gore.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN CORRESPONDENT (voice-over): Throughout his campaign, Governor George W. Bush has defended the death penalty and the way it has worked in the 134 executions held in Texas during his time in office.

BUSH: And I'm absolutely confident that everybody who has been put to death is two things: one, they're guilty of the crime charged, and secondly, they had full access to our courts, both state and federal.

MORTON: Bush is confident despite a "Chicago Tribune" investigation which showed irregularities: a pathologist who admitted faking autopsies, a psychiatrist who testified defendants he'd never met were certain to commit more violence, lawyers who slept in court, and so on.

Bush's Democratic opponent, Al Gore, has not made the death penalty an issue; He's for it, too.

GORE: I do support capital punishment, and I have always supported it.

MORTON: And he defends Bush, telling "The New York Times": "If the record shows he's done a terrible job, then I'm sure that would be a legitimate issue. I haven't reached that conclusion."

Illinois Republican Governor George Ryan imposed a moratorium on executions in January: 13 Illinois death row inmates have been proved innocent since capital punishment was reinstated there in 1977.

GORE: If there were the kind of record they found in Illinois in some other criminal justice system, then it would, in my view, justify a moratorium, just as in Illinois.

MORTON: Gore opposes a federal moratorium and has not endorsed a bill ensuring that prison inmates get access to DNA evidence which might prove them innocent. Gore may remember past campaigns when Republicans labeled Democrats soft on crime, as in this ad from 1988.

(BEGIN VIDEO CLIP, 1988 BUSH CAMPAIGN AD)

ANNOUNCER: As Governor Michael Dukakis vetoed mandatory sentences for drug dealers, he vetoed the death penalty.

(END VIDEO CLIP)

MORTON: A Gallup poll last February shows 66 percent of Americans favor the death penalty, down from 80 percent in 1994, but still a substantial majority. And that's another reason Gore may not want to make it an issue in his campaign.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: There's much more ahead on INSIDE POLITICS.

Still to come:

(BEGIN VIDEO CLIP)

STUART ROTHENBERG, CNN POLITICAL ANALYST: By the time we get to October, November, they may well be fighting for control of the Senate.

CHARLES COOK, "NATIONAL JOURNAL": I just don't think all the breaks are going to fall their way.

(END VIDEO CLIP)

WOODRUFF: Stu Rothenberg and Charlie Cook on the Democrats' chances for a Senate takeover, and a look at the key races. Plus, echoes of the 1970s, as our Bill Schneider awards a former chief executive the "Political Play of the Week." And later, the presidential hopefuls and their political dads: a look at the role of fatherly advice.

(COMMERCIAL BREAK)

WOODRUFF: We'll have more of the day's political news coming up, but now a look at some other top stories.

President Clinton says he is concerned about soaring gas prices in the Chicago-Milwaukee area. The price of gas there has topped two dollars per gallon, 50 cents more than the national average. Mr. Clinton says he wants to know what is fueling the price explosion.

(BEGIN VIDEO CLIP)

WILLIAM J. CLINTON, PRESIDENT OF THE UNITED STATES: We know that it would be more expensive for a little while until the transportation and the refinery problems are solved. What we don't know is whether there was any price gouging. So we've got the Federal Trade Commission looking into that, and we've also had the Department of Energy and the Environmental Protection Agency looking into it. I'm very worried about it, but I'm hoping that we can break the logjam on it soon.

There is more evidence that a severe drought is afflicting parts of the United States. Next week, Georgia plans to toughen water restrictions and extend them to 144 counties. Parts of Florida need more than a foot and a half of rain to catch up to normal. And in Alabama, National Guard troops may start distributing drinking water in towns where wells are dry. National data released today indicates this spring was the hottest in U.S. history.

The weather is giving firefighters an upper hand with two Colorado wildfires. Cooler temperatures and moist air moved into the region today. The Bobcat fire, burning north of Denver, is at least 40 percent contained. The High Meadows fire, south of the city, is about 25 percent contained. So far, the two fires have burned more than 17,000 acres.

A memorial service could replace the traditional bonfire at Texas A&M University this year. Twelve students were killed and 27 injured when the massive log structure collapsed during construction last November. University President Ray Bowen announced changes to the annual ritual of building and lighting the bonfire.

(BEGIN VIDEO CLIP)

RAY BOWEN, PRESIDENT, TEXAS A&M UNIVERSITY: We can have a bonfire if it's completely restructured. We will have a bonfire if it's completely restructured. The restructuring has to achieve safety, not just in the near term, but forever. The bonfire has to create a positive image for this university and be supportive of its broader academic and leadership goals.

(END VIDEO CLIP)

WOODRUFF: A much smaller bonfire, designed by professionals, will continue the tradition in the year 2002.

The lights are on, traffic signals are working, refrigerators are running, and schools are open again in Detroit. The city's public buildings have been under something of a blackout since the power failed on Monday. At its peak, the outage affected some 4500 buildings and forced the school system to shut down.

When INSIDE POLITICS returns, one Florida candidate's decision as a sign of GOP jitters about maintaining control of the Senate.

(COMMERCIAL BREAK)

WOODRUFF: And now to campaign 2000 and the battle for the U.S. Senate. Even with the math favoring Democrats this year -- they have just 14 seats to defend as opposed to 19 for Republicans -- observers have generally viewed the Senate as likely to remain in Republican hands. But with stronger-than-expected fund raising and an issue environment working to their advantage, Democrats may now be poised to give the GOP a tougher run than once predicted.

Our Beth Fouhy takes a closer look.

(BEGIN VIDEOTAPE)

BETH FOUHY, CNN CORRESPONDENT (voice-over): Republican Tom Gallagher's decision to drop his Senate bid hit the Florida political world like one of the state's famed summer storms.

TOM GALLAGHER (R), FORMER FLORIDA SENATE CANDIDATE: I wanted to be a United States senator. I'm willing to admit that.

FOUHY: His choice to spare the party a nasty primary fight with Congressman Bill McCollum in order to hold the seat being vacated by Republican Connie Mack was just the latest sign that the GOP grip on the Senate may be more tenuous than once thought.

Observers say a strong field of Democratic candidates, coupled with legislative miscalculations by the GOP leadership on Capitol Hill, have given Democrats a fighting shot at picking up the seats they need to gain control.

JIM JORDAN, DEMOCRATIC SENATORIAL CAMPAIGN COMMITTEE: The question is really whether our candidates can put together solid campaigns and raise enough money to communicate their messages, and whether or not several very conservative Republicans can successfully reinvent themselves in an election year.

FOUHY: Senate Republicans are finding themselves boxed in on issues where Democrats enjoy clear popular support. For instance, Republicans shot down a patients' bill of rights sponsored by Democrat Ted Kennedy that would have broadened access to health services and allowed patients to sue for denial of coverage.

Democrats like Deborah Ann Stabenow of Michigan have seized the issue like a blunt weapon, hammering her opponent, incumbent Spence Abraham, for his no vote. It's a campaign viewed as one of the tightest in the nation.

Just this week, Abraham and two other endangered GOP incumbents, Lincoln Chafee of Rhode Island and Conrad Burns of Montana, joined Democrats to pass a symbolic measure to expand prescription drug coverage for Medicare recipients. Burns' Democratic challenger, Brian Schweitzer, has put the drug issue front and center in that tight race.

STEVEN LAW, NATIONAL REPUBLICAN SENATORIAL COMMITTEE: Voters are interested in issues that are traditionally Democratic issues, like education and health care. And what our leadership has sought to do is to have strong, identifiable Republican alternatives on those issues.

FOUHY: But GOP leader Trent Lott has been criticized as slow to develop those alternatives, leaving his troops exposed and vulnerable on popular issues.

SEN. TRENT LOTT (R-MS), MAJORITY LEADER: Every time I see that commercial on TV that they ran during the Super Bowl -- and I saw it again last night -- of the cowboys herding cats -- have you seen that commercial? It's a great commercial. And it reminds me of my job.

FOUHY (on camera): Republicans say they've long expected a tough fight to retain control, and despite some of their problems, they say some of their more endangered incumbents are actually stronger than once expected.

(voice-over): Freshman Rick Santorum of Pennsylvania is facing an underfunded challenge from Democratic Congressman Ron Klink. And Minnesota's Rod Grams is strengthening his position while Democrats scramble to settle on a challenger.

Beth Fouhy, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: Just a short while ago, I spoke with CNN analysts Stu Rothenberg of "The Rothenberg Political Report" and Charlie Cook of "The National Journal" about the November Senate races. I began by asking what are chances that the Democrats will take control.

(BEGIN VIDEOTAPE)

WOODRUFF: Charlie, Stu, thank you for being here. Let's look at the overall Senate picture.

It's the middle of June, Stu. What are the Democratic chances right now for picking up -- for regaining control of the Senate?

ROTHENBERG: I think it's a long shot, but it's certainly possible. I've gone race by race, Judy, and I have the Democrats right now positioned to gain two to four Senate seats. They need five or six depending upon which party controls the White House. They're not quite there yet, but I don't think we should ignore this. And I think by the time we get to October and November they may well be fighting for control of the Senate.

WOODRUFF: Charlie.

COOK: I'm a little less bullish for Democrats than Stu is. I'm saying like one to three seat pick up, maybe a 10, 15 percent chance. I think that certainly there are a lot more targets out there for Democrats to go after. And with some breaks could they get to five or six? Yes, but I just don't think all the breaks are going to fall their way.

WOODRUFF: All right. Well, let's look at some of the specific states where you've got a really tough contest in Florida. Actually, the GOP got good news in Florida yesterday. One of the Republican contenders dropped out.

ROTHENBERG: Yes, this is a good Democratic takeover opportunity, but not as good as it was a few days ago. When Tom Gallagher dropped out, it guaranteed that Bill McCollum, the congressman -- Orlando-area congressman -- would be the Republican nominee. That means he does not have to spend million-and-a-half dollars, $2 million to win the nomination and be broke in September. He's going to be able to husband his resources.

This is a good race. The Democratic nominee is Bill Nelson, a strong candidate. The Democrats need to pick up this seat to make significant gains in the fall.

WOODRUFF: (UNINTELLIGIBLE)

COOK: I would say the Republican chances of holding on the seat just went from, say, 30 percent up to 40 percent. That clearing the way, not having a nasty, divisive, expensive primary I think is very good for Republicans.

But you know, the bottom line is that McCollum is still considerably further away from the state's 50-yard line than is Bill Nelson, and that while I don't think impeachment's at the forefront, I think it's largely a dead issue But having been among the most visible of the House managers during the impeachment trial I don't think is going to help Bill McCollum a whole lot.

So I think it's going to be a little bit more of a race, but I would still give Democrats a bit of an edge. But Republicans needed this, and I'll tell you, the national Republican strategists were incredibly relieved when they found out Gallagher dropped out, because I think they think they're going to have a fighting chance now.

WOODRUFF: You get the sense somebody worked really hard to make this happen.

COOK: I -- it was not accidental.

WOODRUFF: All right. Let's move up north to New Jersey. Jon Corzine, the Democrat, Stu, clearly has the money advantage. What does Congressman Bob Franks need to do to compensate?

ROTHENBERG: Well, I think he has to convince people, particularly Republican contributors and maybe people of the national Republican senatorial committee, that he can win this race.

There are some polls out now -- there's a new one showing Corzine up by only seven points or 10 points depending upon what kind of voters you're looking at. Those aren't bad numbers. The problem is there's another set of numbers that are terrible, and that's Corzine's dollars. His ability to spend another $35 million has got to be there, and Bob Franks has got convince Republicans that they ought to contribute to him to invest in this campaign rather than spend money elsewhere. And I think it's going to be tough for him.

WOODRUFF: Charlie?

COOK: In the Senate, every Senate seat is the same, it counts the same, whether it's North Dakota or whether it's California and New York. And yet the price tag on each Senate seat varies enormously. And New Jersey, wedged between the New York City media market and the Philadelphia media market, is just a horrendously expensive market.

Republicans have to decide whether they're going to play, and are they going to fully fund -- and I mean going way beyond the limits, getting into independent expenditure, issue advocacy -- are they going to enable Bob Franks, their candidate, to go toe-to-toe with Jon Corzine or not?

And the thing is it's going to require Republican senators going out there and raising a heck of a lot of money to keep them competitive. And that's a strategic decision that they've got to make.

WOODRUFF: And spending resources that might have gone...

COOK: That might have gone to Montana or someplace else. Absolutely.

WOODRUFF: All right. New York, next door. It's now -- what? -- been what a month since Rudy Giuliani dropped out. It's four weeks that we've known it's Congressman Lazio against first lady Hillary Rodham Clinton.

ROTHENBERG: I've seen some strange commentary on this race. There was a "New York Times" poll out the other day that showed Mrs. Clinton up by -- I don't know -- four or six points. And I saw somebody saying, well, the race is blown open, why there's been significant movement.

In fact, if you look at the last four or five polls over the last three weeks this is still a very close race, whether it's -- whether it's a dead heat or six points, I don't know. But I think it's still driven by Mrs. Clinton's negatives. Lazio is still within range. He's still unknown.

This is definitely a toss-up, in my mind.

WOODRUFF: So not much change?

COOK: Well, you know, the more things change the more they stay the same. And before Giuliani dropped out, most of the polls had the race between dead-even and Giuliani down by four points. Now most of the polls are showing the race anywhere from dead-even to Rick Lazio down by four points.

I tend to think that Republicans are better off with a candidate that not a whole lot of people hate than a candidate that a lot of people hated. I mean, you know, call me old-fashioned, but I think they're a little better-off. They won't do as well in the city as they would have with Giuliani, but I think they'll do better upstate, where they don't think that New York City is Sodom and Gomorrah on the Hudson -- or where they do think so they'd rather have somebody from the suburbs.

(END VIDEOTAPE)

WOODRUFF: We are breaking into that interview to bring you a breaking story, this story just in: The Energy Department announces that the missing hard-drive at the Los Alamos laboratory -- hard- drives containing nuclear secrets have been found. Energy Secretary Bill Richardson has just announced within the last few minutes that those hard-drives were located in a secure, so-called "x" division of Los Alamos, an area that had previously been searched by security officials. They were reportedly, as CNN was told, they were located behind a copying machine.

The energy secretary, Bill Richardson, was just quoted as saying that the search has been under way for two weeks. And -- but he went on to say: "I will continue to aggressively pursue this serious matter. There will be accountability and disciplinary actions taken regarding the Los Alamos incident."

Once again those two hard-drives containing nuclear secrets at the Los Alamos laboratory in New Mexico have now been located.

And CNN will bring you more details on this just as soon as they become available.

INSIDE POLITICS will be right back.

(COMMERCIAL BREAK) WOODRUFF: Tomorrow marks the 28th anniversary of the Watergate break-in at the Democratic National Headquarters. Two years later, President Richard Nixon resigned after being forced to turn over tapes of his white house conversations detailing his role in the cover-up. This week, some of those tapes are back in the news, and our Bill Schneider joins us now to explain -- Bill.

SCHNEIDER: Judy, what price history? Well, you know, we got an answer this week when the government agreed to compensate a former president for historically valuable materials. It took 20 years of litigation, but the president finally got his money, and the political "Play of the Week" besides.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): 1974: President Richard Nixon resigns in disgrace. The government promptly confiscates his presidential records. Those belong to the taxpayers, Congress says, the people who paid his salary, but that point had never been established in law. Oops. So, Nixon sued, demanding payment for the seized materials.

Was he trying to profit from his wrongdoing? Not exactly, or at least not entirely. You see, other former presidents have government- operated presidential libraries to which they donate their papers. The Nixon Library is privately run. Nixon wanted the money to help fund the library and perpetuate his legacy.

In 1992, a federal appeals court ruled that Nixon was entitled to compensation. For seven years, the government and the Nixon estate have been arguing over the fair value of 3,700 hours of secret tape recordings and millions and millions of pages of documents.

What's the fair value of the original manuscript of Nixon's resignation speech?

(BEGIN VIDEO CLIP, 1974)

RICHARD NIXON, PRESIDENT OF THE UNITED STATES: I have never been acquitted. To leave office before my term is completed, it's abhorrent to every instinct in my body.

(END VIDEO CLIP)

SCHNEIDER: How about this tape recording from March, 1973, when John Dean warned the president:

(BEGIN VIDEO CLIP, 1973)

JOHN DEAN, WHITE HOUSE COUNSEL: We have a cancer within -- close to the presidency that's growing. It's growing daily. It's compounding. It grows geometrically now because it compounds itself."

(END VIDEO CLIP)

SCHNEIDER: Or this one in the next day, when Nixon told his henchmen: (BEGIN VIDEO CLIP, 1973)

NIXON: I want you all to stonewall it, let them plead the Fifth Amendment, cover-up or anything else, if it'll save it -- save the plan. That's the whole point.

(END VIDEO CLIP)

SCHNEIDER: Or even this recording of Nixon telling a caller in September, 1972:

(BEGIN VIDEO CLIP, 1972)

NIXON: This is just, you know, one of the side issues and a month later everybody back and wonders what the hell the shouting was about. Yeah, yeah. OK, wall any way, get a good night's sleep. And don't bug anybody without asking me, OK?

(END VIDEO CLIP)

SCHNEIDER: On Monday, we got the answer: $18 million. That's what the Justice Department agreed to pay the Nixon estate. After taxes and lawyers' fees, some $6 million will go to the Nixon library and foundation. The ironies abound. The taxpayers are paying for materials that became valuable because the president betrayed the taxpayers, and Nixon's finally getting government funding for his library. As President Nixon said in April, 1973:

(BEGIN VIDEO CLIP, 1973)

NIXON: In this matter, nothing is beyond the realm of possibility."

(LAUGHTER)

(END VIDEO CLIP)

(END VIDEOTAPE)

SCHNEIDER: Nope. Not even a disgraced president scoring the political "Play of the Week" six years after he dies. They didn't call him "Tricky Dick" for nothing. Now you've got to wonder, who's got custody of Monica Lewinsky's blue dress, and are taxpayers going to end up having to pay for that one, too?

WOODRUFF: Bill Schneider, let's double back to that story that we just reported a few minutes ago. Those missing hard drives containing nuclear secrets of Los Alamos have now been located.

Politically speaking, does this mean Bill Richardson is in better favor as a possible vice presidential choice? Where does this leave him?

SCHNEIDER: I think it still leaves him in a lot of trouble. This whole thing was not handled very well. My goodness, nuclear secrets found behind a copying machine? The investigators, we are informed, are treating this as a possible scene of a crime, so I don't think it let's him off the hook. He's a very controversial figure, and Republicans in Congress are stopping just short of demanding his resignation. So he's still in a lot of hot water because of the whole way this has been handled. At best, it looks like a keystone cops operation.

WOODRUFF: All right, Bill Schneider. And just to reiterate, our lead sorry at this hour on CNN, the reports from the Department of Energy that those missing hard drives containing nuclear secrets, have been missing now for several weeks from the Los Alamos Laboratory in New Mexico, have now been located. As you just heard Bill Schneider say, they reportedly were found behind a copying machine. CNN will bring details on that story as we have them.

Still ahead on INSIDE POLITICS, the first lady of Texas steps into the political spotlight and fills in for her candidate husband.

(COMMERCIAL BREAK)

WOODRUFF: At the GOP state convention in Texas today, Republicans sang the praises of their governor and presidential hopeful. But with George W. Bush campaigning in Ohio and Kentucky, it was his wife, Laura, who addressed convention-goers and party loyalists in Austin.

Charles Zewe reports.

(BEGIN VIDEOTAPE)

CHARLES ZEWE, CNN CORRESPONDENT (voice-over): It was a presidential campaign coming-out party for Texas first lady Laura Bush, marking what was billed as her first political speeches, on behalf of her husband, the Texas governor and GOP nominee-apparent. She touted her husband's education reforms and his proposal to return most of the federal budget surplus to taxpayers.

LAURA BUSH, WIFE OF GEORGE W. BUSH: He believes that government surpluses do not belong to the government. Government surpluses belong to the people who have worked hard to pay them.

ZEWE: She drew her biggest applause when she said a new Bush administration would return honor to the White House.

L. BUSH: I think Americans are ready for a new kind of leader: someone who has an optimistic message for our country; someone who is positive, hopeful, and inclusive; someone who unites people instead of dividing them; someone who will return dignity to the White House.

ZEWE: At the state Republican convention later, Mrs. Bush told delegates that, above all else, Americans are looking for the next president to be someone who upholds the trust of the American people. She drew a standing ovation when she declared that people along the campaign trail are telling her husband:

L. BUSH: I'm counting on you. I want my son or daughter to respect the president of the United States. ZEWE: Later, Mrs. Bush told reporters that after being opposed to her husband's candidacy initially, she has now warmed to the idea and plans some solo trips onto the campaign trail this fall. She would not say if she differs with the governor on the issues.

L. BUSH: If I differ with my husband, I'm not going to tell you, sorry.

ZEWE: An expert on the role of first ladies says that Mrs. Bush's most valuable contribution to her husband will be in what she does behind the scenes.

CARL ANTHONY, AUTHOR: Certainly Governor Bush has pointed to the fact that it was his wife who both urged him and supported him in his effort to forsake alcohol when he turned 40 years old. So, I think there's a strong emotional reserve there and a great strength in her that there's no need for the public to see or share in, but that will prove vital to the candidate.

ZEWE (on camera): Mrs. Bush says she'll be an activist first lady, campaigning for issues close to her heart, like improving education and literacy. When asked whether she would model herself more like Hillary Clinton, or Barbara Bush, her mother-in-law, she said: "I'll just be Laura Bush."

Charles Zewe, CNN, Houston.

(END VIDEOTAPE)

WOODRUFF: Well, while the women in their lives have been crucial. both George W. Bush and Al Gore have followed in the footsteps of their political fathers. In the spirit of Father's Day on Sunday, Jonathan Decker, author of the new book, "Great Dads," talked with both candidates about the advice they received from their fathers.

(BEGIN VIDEO CLIP)

JONATHAN DECKER, AUTHOR, "GREAT DADS": Al Gore talks a lot about when he first ran for Congress and its impact on him. He decided to run. He called up his father and said to him: There's a seat that's open. I'm going to run. What do you think of it? And his father actually tried to steer him away from it. He said: It's a tough road to haul, to run for Congress, and I think, you know, maybe you ought to continue with your studies in law school.

But he plowed ahead, and his father said: I'd love to help you out. Can I contact my old supporters? Can I write some letters on your behalf. And he said: No, that's alright. I want to do this on my own. And I think, in some ways, it shows a lot about the way he's running his campaign right now.

One of the interesting things about George W. Bush is the lesson that he learned from his father that you shouldn't be afraid of failure. And I thought: That's so strange for a person running for president to not be fearful of failure. But it was one of the things that he saw his father really go through in losing in 1992 when he ran for reelection. And he realized that his integrity is still intact.

And one last thing that he learned from his father is that, despite the fact he's been governor of the state of Texas for two terms -- well, in his second term right now -- being a father is the most important job he'll ever have.

(END VIDEO CLIP)

WOODRUFF: Very interesting. That's all for this edition of INSIDE POLITICS, but of course you can go online all the time at CNN's allpolitics.com.

As we say goodbye to you, we also bid goodbye to our longtime director, Leslie Green (ph), who is moving on to other duties here at CNN. Her cool head has saved this program many times, and we will miss her in the busy months ahead. Good luck, Leslie.

This programming note: The new head of the Al Gore presidential campaign, Bill Daley, will be the guest tonight on "CROSSFIRE." That's at 7:30 p.m. Eastern.

I'm Judy Woodruff, "WORLDVIEW" is next.

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